Supreme Court Tariff Ruling Strikes Down Trump IEEPA Tariffs: Stock Market, Section 122, and the $175 Billion Refund Fight

The most consequential Supreme Court tariff ruling in modern American history has detonated across financial markets, global trade relationships, and the White House. On February 20, 2026, the Supreme Court held in a 6-3 decision issued by Chief Justice Roberts that the tariffs President Trump imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful. The Supreme Court tariff ruling instantly erased hundreds of billions of dollars in trade policy — and within hours, President Trump signed a new executive order replacing the IEEPA tariffs with a 15% global tariff under Section 122 of the Trade Act of 1974. Markets are in turmoil today, Monday, February 23, 2026.

SCOTUS Tariff Ruling: The 6-3 Vote That Rewrote U.S. Trade Law

Chief Justice Roberts delivered the majority opinion, joined in full by Justices Gorsuch and Barrett, and joined in part by Justices Sotomayor, Kagan, and Jackson. Justices Thomas, Alito, and Kavanaugh dissented and would have held that IEEPA does authorize tariffs.

The heart of the Supreme Court tariff decision was a clean statutory question: IEEPA authorizes the President to "regulate importation or exportation" — but absent from this lengthy list of powers is any mention of tariffs or duties. The Court held that had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly — as it consistently has in other tariff statutes. The ruling applies to the IEEPA tariffs only — it does not affect Section 232 national security tariffs, Section 301 tariffs on China, or USMCA-related provisions.

Section 122 Tariffs Replace IEEPA: Trump's Immediate Counterpunch

Trump did not wait. Within hours of the Supreme Court tariff ruling on Friday, he signed a new executive order:

The Section 122 tariff provisions exclude USMCA-qualifying goods from Canada and Mexico, goods subject to Section 232 tariffs, critical minerals, pharmaceuticals, and certain electronics. Trump simultaneously announced plans to launch new Section 301 investigations covering most major trading partners on issues ranging from industrial overcapacity to pharmaceutical pricing practices.

Stock Market Today: Dow, S&P 500, and Nasdaq Slide on Tariff Chaos

Markets celebrated the SCOTUS tariff ruling on Friday — then gave it all back on Monday as Trump's 15% Section 122 tariff reintroduced uncertainty.

Gold prices jumped as the new tariffs heightened market uncertainty about the outlook for inflation and global growth. Spot gold advanced more than 1%, while gold futures rose 2%. The Supreme Court's decision to strike down Trump's reciprocal tariff authority sent European stocks lower and Indian stocks higher as the U.S.'s trade partners searched for a new status quo.

The $175 Billion Refund Fight: Who Owes What to Whom

The Supreme Court tariff ruling has opened the door to one of the largest potential refund battles in U.S. legal history. The Penn Wharton Budget Model projects that reversing the IEEPA tariffs will generate up to $175 billion in refunds. The Supreme Court ruling did not explicitly order immediate refunds — however, the decision that the tariffs were collected illegally has opened the door to refund claims. Importers generally have 180 days after goods are liquidated to protest and request refunds from U.S. Customs and Border Protection.

The most recent estimates from U.S. Customs and Border Protection imply that $142 billion will have been collected from tariffs enacted under IEEPA authority over the course of 2025. The administration had previously stipulated it would issue refunds following a final and unappealable court order — but the executive order revoking IEEPA tariffs did not explicitly address refunds, sending that question back to the U.S. Court of International Trade for further proceedings.

Trump Attacks the Supreme Court — Then Vows More Tariffs

In a Truth Social post on Saturday, Trump wrote: "Those members of the Supreme Court who voted against our very acceptable and proper method of tariffs should be ashamed of themselves. Their decision was ridiculous but, now the adjustment process begins, and we will do everything possible to take in even more money than we were taking in before!"

Trump also warned on Truth Social: "Any Country that wants to 'play games' with the ridiculous Supreme Court decision, especially those that have 'Ripped Off' the U.S.A. for years, and even decades, will be met with a much higher tariff, and worse, than that which they just recently agreed to. BUYER BEWARE!" Treasury Secretary Scott Bessent confirmed the administration has a full toolkit of alternative trade authorities and intends to use every available lever to reconstitute the tariff regime through legally permissible means.

Global Reaction to the Supreme Court Tariff Ruling

The European Commission requested full clarity on the steps the United States intends to take following the Supreme Court ruling, stating the current situation is not conducive to delivering fair, balanced, and mutually beneficial transatlantic trade and investment, as agreed by both sides in the EU-U.S. Joint Statement of August 2025. A planned U.S.-India trade delegation meeting in Washington has been placed on hold. China's President Xi Jinping gains leverage ahead of talks next month. The UK's preferential trade deal status is now uncertain. The Supreme Court tariff ruling has, in short, forced every U.S. trading partner to recalculate from scratch.